How do subsidiary stock warrants outstanding affect consolidated earnings per share?
A) They will be included in both basic and diluted earnings per share if they are dilutive.
B) They will only be included in diluted earnings per share if they are dilutive.
C) They will only be included in basic earnings per share if they are dilutive.
D) Only the warrants owned by the parent company affect consolidated earnings per share.
E) Because the warrants are for subsidiary shares, there will be no effect on consolidated earnings per share.

Question

Quizplus · Accepted Answer

Subsidiary stock warrants outstanding will only be included in diluted earnings per share if they are dilutive. This is because diluted earnings per share takes into account the potential dilution from all dilutive securities, including outstanding stock warrants. Basic earnings per share only considers the number of common shares outstanding and does not take into account any potentially dilutive securities.

How Do Subsidiary Stock Warrants Outstanding Affect Consolidated Earnings Per